Milliseconds Matter: Why Inside Information is Sports Betting’s Biggest Vulnerability

Take a look back at some of the biggest betting scandals of the last few years, and you’ll notice something surprising: they weren’t just about what happened during the game; they were about what a handful of people knew before everyone else. 

There’s the former NBA role player banned for life, who later pleaded guilty to a wire-fraud conspiracy tied to prop-bet manipulation. And there are the two Major League pitchers indicted for allegedly throwing predetermined pitches outside the strike zone to benefit a small group of insider bettors.

Even college sports have been caught in the crossfire, with basketball players stripped of their eligibility after investigators found that they had shared non-public information with bettors and, in some cases, manipulated their performance to financially benefit themselves and others.

On paper, no two cases appear to be identical. Some are classic fixing, where an athlete does something intentionally to shape the outcome of a game. In others, the player is passing on non-public information about who will play, for how long, and under what limitations. Still, many of them are discussed under the same umbrella of “inside information,” a catch-all phrase that often conflates an advantage derived from private information with conduct that crosses into outright game manipulation.

This story is about that line and why it’s becoming increasingly difficult to hold.

The Market Built on Split-Second Secrets

Information is what modern sports betting markets are built on: injury reports, depth charts, travel schedules, expected minutes, and even weather. The more money that flows into live betting and micro-markets, whether that’s wagers on a single pitch, a specific stat line, or a brief stretch of playing time, the more sensitive those markets become to small pockets of intel that’s not available to the public. And that has exposed real gaps in how regulators and leagues define and protect sensitive competitive information. 

In financial markets, everything is more cut and dried, with insider information having a long-established meaning: non-public data that can move prices. Insiders who have access to this information are not allowed to trade on it. Sports betting has borrowed the term, but there’s no universal definition, so leagues and regulators interpret it in different ways. 

One challenge is that league rules on insider information haven’t always been as clear or uniformly understood as they need to be. Greg Brower, a former U.S. Attorney and Assistant FBI Director who is now practice chair at Brownstein Hyatt Farber Schreck, told CasinoBeats that clarity remains an issue.

“When I look at some of the leagues’ policies, it looks like clarity could be improved,” he said. “Players need to know exactly what the rules are.”

That lack of uniformity isn’t limited to the leagues. As legal betting has spread across the U.S. since the repeal of PASPA in 2018, state regulators have often operated reactively, tightening rules only after the latest scandal has come to light, rather than proactively setting expectations for what team information constitutes market-sensitive information and how it should be handled. 

The current rulebooks weren’t designed for a world where a single missed minute or one controlled pitch would be able to swing thousands of live wagers. It would be unfair to say this vulnerability is only about corruption. It’s much more than that. Legal sports betting in the U.S. is still new, but the assumptions underneath it are not. 

Much of the current framework reflects ways of thinking about information and integrity that predate nationwide legalization. The difference is that information now travels faster and moves far more money than those assumptions were built to handle.

The scandals that we’ve seen in recent years aren’t just about gambling. They’re about information: who controls it, who leaks it, and how quickly it can distort a market built to react in milliseconds.

Inside Information Isn’t New: The Original Edge

While the term “inside information” may be new to the general public in the context of sports betting, the concept itself is well-established. It has been part of sports betting for much longer than today’s legal markets, real-time data, or micro-wagers. 

For bookmakers who worked before the dawn of the Internet, it was the foundation of the job. Michael Reeder, a former bookmaker who came up in Las Vegas in the late 1970s and early 1980s, told CasinoBeats that the fundamentals haven’t really changed.

“The only difference now is that the wagers are micro wagers, but the information of the game itself has always had inside information,” he said.

Reeder’s career was built in an era when finding an informational edge meant working the phones and cultivating sources, not scraping an API.

“I grew up in the late ’70s, early ’80s, and spent time with a lot of the people who were professional bettors in Vegas,” he said.

In Reeder’s day, bettors had a network that included athletic directors, sportswriters, assistant coaches, and even a few umpires whom they relied on for early word about injuries, lineup changes, or any other information that might move a number before the market caught up. 

Back then, what mattered most was simple.

“Injuries, injuries, injuries, without a doubt,” Reeder said.

When a star player went from being probable to out, it didn’t just make headlines that night. If a bettor heard that information early, they could take a position before the line adjusted, then return after the move and take the opposite side. If the game landed within the middle they created, they could win one or even both bets. The edge wasn’t about manipulating outcomes. It was about getting to the number before the market did.

While getting information about injuries was often gold, sometimes the most valuable information had nothing to do with them. Reeder recalls how environmental factors, such as temperature or stadium conditions, often influenced the outcomes of games in ways that casual fans might have overlooked. He used Minnesota as an example, saying, “Depending on the temperature, the average score was one and a half runs different.”

At the old Metrodome, airflow worked both ways. On hot, humid days, air-conditioning units in center field pushed cold, dry air toward home plate, making it harder for balls to carry. On cold days, the heating system behind home plate blew warm, moist air out toward center field, creating very different hitting conditions. These were facts anyone could observe, but only a few tracked them closely enough to act before the line moved.

As Reeder explained in our interview, that was the real business of bookmaking. It was less about trying to beat bettors on every game, and more about setting “the line in the right spot” and managing risk as information trickled in. He also made it a point to draw a clear line between inside information and game fixing.

“Fixing involves basically determining a winner and a loser to a wager,” he said. “Inside information involves trying to get the best line for your wager, and possibly a wager made on information you get.” 

Drawing this distinction is important because the pre-Internet information economy was slow and often limited to those who lived close enough to the action to hear a rumor or make the right phone call. Today, that type of information can ripple through a global market instantly, moving odds in seconds instead of hours. The stakes are no longer the same, even if the underlying incentives have barely changed.

What’s Changed: The Speed of Modern Betting Markets

For as long as sports betting has existed, people have sought to gain an edge by accessing inside information. Real-time pricing models and betting menus that refresh in seconds have replaced the rumor-driven ecosystem of Reeder’s day, where a phone call from a trainer or assistant coach might give bettors hours to act. 

Visit any of today’s legal sportsbooks, and you’ll see hundreds of micro-markets on a single game. A substitution, a minute restriction, or a pitcher skipping a warm-up can all trigger thousands of live bets almost immediately. In this type of environment, even a brief delay between when information enters the market and when it becomes public can have enormous financial consequences. 

That’s especially true for injury information. As sports law scholar John Holden, an associate professor of business law and ethics at Indiana University’s Kelley School of Business, told CasinoBeats: “Injury data, particularly for some players, can really change the outlook of an entire game. Someone gaining access to the information before the market would have superior information could undermine the integrity of the markets.”

Holden’s statement aligns with what Reeder saw decades earlier, but the scale has changed. In the pre-Internet era, an informational edge might affect a handful of connected bettors. Today, the same detail, whether it’s a starter sitting, a minute restriction, or a pitcher skipping a warm-up, can move a national market instantly. 

Holden also points out that the concept of “inside information” itself was imported into sports betting from financial markets. “Inside information is a term adopted from the regulation of financial markets and is being applied to sports betting markets,” he said. “It refers to non-public information.”

Unlike securities trading, however, sports betting lacks a single, uniform framework governing how that information should be handled. And oversight varies widely by jurisdiction. As Holden put it, “…betting markets have always been information-driven, I think state regulators are largely reactive, instead of proactive.” 

That reactive approach clashes with a market that is built to continuously price information. When odds adjust in milliseconds, even brief access to non-public information can become a tradable edge.

Where the Rules Break Down

While sports betting laws exist, the challenge regulators face is that many of the definitions and enforcement tools were designed for a more straightforward betting menu before prop-heavy, micro-level markets made tiny pockets of non-public information much more valuable and far easier to exploit.

Recent criminal cases have highlighted these weaknesses. According to Brower, the former U.S. Attorney and Assistant FBI Director, the allegations themselves have changed the level of scrutiny leagues and regulators are facing.

“These federal criminal cases have really brought the issue to light,” Brower told CasinoBeats. “They’ve prompted state regulators to review whether their laws actually cover the conduct alleged, and they’ve also pushed leagues to review internal policies that were once thought sufficient.”

One of the most discussed examples is prop bets and micro-markets that allow wagers on individual plays and player actions, rather than the outcome of the game itself. We asked Brower about whether prop bets should be limited or banned altogether, or if they’re something the industry can control.

“There is a lot of focus on that, and there will be more scrutiny,” he said.

While Brower stopped short of calling for an all-out ban on prop bets, he did say the industry will increasingly be expected to justify how those markets can exist without creating new vulnerabilities.

“They [leagues and sportsbooks] need to be able to explain why prop bets are important, why they should stay, and what kind of mitigation or preventative measures can be put in place to make sure they’re not abused.” 

The attention on these betting markets is a reflection of how far modern betting has moved beyond the scenarios lawmakers initially anticipated. While many states have laws in place that make it illegal to wager on non-public information, they were drafted before the recent scandals surrounding prop bets came to light. 

With betting menus that include individual pitches, substitutions, or short stretches of playing time, the line between routine team information and market-moving data becomes increasingly difficult to manage. Internal communications that once carried little risk can now affect betting markets almost instantly.

Brower said this has forced leagues to rethink how information flows inside their organizations, not just at the player level but across trainers, support staff, and others with proximity to teams.

“What the leagues need to do is make sure their internal policies on insider information are very clear and understood by everybody affected,” he said. “Players and staff need to know exactly what’s permissible and what’s not.”

All of these factors have contributed to a system that is increasingly under strain. Enforcement models were designed for a betting environment where information moved slowly, and wagers settled over hours or days, not seconds. With today’s betting markets responding to new data instantly, the gap between regulation and reality has become impossible to ignore.

Why the Line’s Getting Harder to Hold

Long before sports betting became legal in states across the U.S., the practical distinction Reeder described between using information to find the best number and actively manipulating what happened on the field was easier to manage because the betting environment was slower and more limited. 

Prop bets and micro-markets have done more than just expand the menu. They’ve shortened the gap between private information and public odds movement, and they tie real money to specific actions: a single decision, a single pitch, or a brief stretch of playing time. 

The changes we’ve seen in the wake of the recent betting scandals, including enforcement and policy shifts such as limits on pitch-specific bets following federal allegations of rigging, demonstrate how quickly those vulnerabilities can become impossible to overlook.

As Brower pointed out, scrutiny is already present, with leagues, sportsbooks, and regulators being pressured to demonstrate that they have guardrails in place before the next scandal forces the issue again. 

That’s what is making the line harder to hold now. It’s not that the difference between an edge and an abuse has disappeared. It’s that the market is increasingly monetizing that gray area in between, and the pressure to define it, police it, and defend it has become more difficult to ignore.